One small convinience of Oanda is that there is no software installation required. Shoudnot be an issue for fulltime traders.
Let me be more specific: I plan to start with a miniacc on fxcm of about 700$. I will only risk about 2% on a single trade and place stops of max 20 pips. Am I in any danger here of ending up owing to fxcm more than 700$? What kind of market conditions would cause me to own them after a bad trade? I live on the other side of the planet from them, would it be, under any circumstances possible for them to come to my country and execute my assets to cover any debt? I own an appartment and that's all. I wouldn't enter the fx market if there is a slight chance I could lose it. Am I paranoied here? Anybody knows of a case where someone lost property because of a defficit in their fx account?
Futures traders are not protected against 'overloss' â Marketsurfer's example (p2) refers to overloss. Since fx trades are being made 'in the fx broker's trading software', broker's can program against overloss occurring â as stated below. NB: verify with individual brokers they do close positions and what amount they use. " Margin Requirement: Up to 200:1 Leverage: Clients must have approximately 1/2% of the value of the positions they hold in their account for each lot of currency being traded (approximately 200:1 leverage). This equates to $50 per lot (10,000 units). This amount does not change after 5:00 PM New York time, which is the rollover cut off, but stays constant at approximately 1/2% per lot the entire day and overnight. Guaranteed Limited Risk: There is also an important safety feature imbedded in this system that prevents clients from losing more money than they have in the account. Should the account equity -- meaning the total floating value of the account -- fall below the margin requirement of approximately 1/2% per lot, the dealing desk will close all positions." http://www.fxcm.com/mini-differences.jsp
I was NEVER given any compensation, whatsoever, for anything I ever said on ET. I was NEVER given any compensation, whatsoever, for any effort to promote or to criticize the offering of any broker or any other company. Any person who says different, like the one earlier in this thread, is a liar.
I have no comment here regarding any particular brokerage company, but I will refer you to the advice of CFTC: Read more about it at:http://www.cftc.gov/opa/enf98/opaforexa15.htm and even more at: www.cftc.gov
Seems everyone's forgot to mention that FXCM requires a $300 minimum initial deposit; with Oanda there is no minimum.
No, your apartment is safe. As I explained before it's the brokers money that's at risk. And it's not in brokers interests to let your losses extend beyond your collateral. That's why they require collateral from their clients to cover their losses. No collateral (or exhausted collateral) means no trading (no open position).
gkishot, I'm a bit confused, and I was hoping you could explain this. You are saying that it is impossible to lose more than you deposit with an FX broker. I don't mean to suggest anything negative about FX brokers, but I did find this in the very first paragraph of the FXCM account agreement, and I was hoping you could explain what it means. I was hoping you could explain what this means.
It's very unlikely situation. I don't know what exactly they mean. You should talk to them directly for the explanation. The only situation I can think of is when a currency has a gap in quotes against you. Then you might wind up owning more than your collateral. But again in order for you to own significantly more than your collateral it has to be very significant / huge gap in quotes. Which is very unlikely. Plus you are going to use on each trade only 2% of your account which makes your situtation even better in terms of safety. Besides you are going to use a stop loss which will provide you with additional safeguard. Once again it's not in their interests for you to have a loss which is much bigger than your collateral and they are going to do everything to prevent it - read to close your position ASAP. If they didn't do it realtime they sure should do it overnight. Otherwise they just suck in terms of managing their own risk. So basically the significant gap in quotes against your position is your only enemy but it's very very unlikely ( I would say 0 chance) in Forex. I suggest you to open a demo account to get the feel of trading Forex and also to contact FXCM for additional explanations.
Well, this concerns me a bit, gkishot. You say you do not understand the written account agreement, in regard to the danger of losing more than your initial investment. Yet you advised people that it is not possible, and then you said it is "very unlikely", then you said it is "very very unlikely", then you said "0 chance", which returns us to your original position that it is impossible. Do you think perhaps it might not be a good idea for you to give this kind of advice, when you don't understand the written account agreement which appears to contradict your advice?